Russia, Through the Looking Glass
Something very strange, something that ought to make the Kremlin’s blood run cold (well, colder) has been happening recently in Russia. The price of oil has been rising, but the stock market has been falling. That’s not supposed to happen.
Mind you, having your national stock market enslaved by oil prices set by foreigners is no picnic. But at least you always have something to hope for. If Russia’s stock market doesn’t even respond to the electric jolt of oil prices, something is very, very wrong.
In her most recent Moscow Times column, hero journalist Yulia Latynina gave some insight as to just what that something might be. She points out that Russia finds itself in between the jaws of a wicked vice where the Chinese oil market is concerned: It has sold off a huge quantity of oil at a price that could prove to be well below market, meaning billions and billions in lost revenues. On top of that, it has committed to provide that oil by building a pipeline whose cost has risen by an astronomical 700%. What this means is simple: Not only will Russia be losing profits, it may actually have to sell a huge quanitity of its oil to China at a dead loss.
Ominously, Latynina predicts that Russia will simply back out of this deal, ignoring its formal committments to the government of China, treating China as if it were Georgia or Ukraine. But China is neither one of those countries, it is one of the world’s most potent economic and military forces, and it won’t simply let Russia walk away from this deal. Latynina worries that war could break out, a war Russia can’t possibly even wage much less win. The result could be that China nips off a big chunk of Siberia just the way Russia recently seized sections of Georgia.
The polices of Vladimir Putin have led Russia to the brink of ruin. It is an outcast among civilized nations, with no powerful allies to help it in its struggle with China over Siberia. Russia’s entire future has been wagered on the price of crude oil, a price set by the same foreigners Putin routinely excoriates and attacks. His polices amount to national suicide, and the people of Russia are to blame. They enabled him, they “elected” him, they turned their backs as he betrayed the anti-Soviet revolution of the 1990s.
At last, the consequences of their reckless, wanton actions are plain for all to see.